Hybridized industrial ecosystems and the makings of a new developmental infrastructure in East Asia’s green energy sector

Abstract

In the midst of intensifying global competition over green energy systems, Korean and Taiwanese companies are rapidly rising as serious exporters of smart microgrids. What explains the emergence of an East Asian presence in the global green energy sector? My core argument is that policymakers in Korea and Taiwan view smart microgrids strategically as a new developmental infrastructure, which will help position domestic firms onto a new competitive footing. I show that in Korea, this is taking place through the state’s leveraging of the nation’s innovation champions – globally leading chaebol or conglomerates and their networks of small and medium enterprise (SME) suppliers in the domestic market. In Taiwan, the state has leveraged government research institutes and their rich networks with internationally competitive SMEs and with large domestic firms. These efforts reflect the creation of a new form of public and private cooperation, which I refer to as ‘hybridized industrial ecosystems’. These institutional mutations in the green energy sector suggest that the state’s transformative capacity has been expanding, not shrinking as many recent writers on the developmental state conclude. Overall, the findings from this fresh new sector represents the unfolding of a new chapter of developmental thinking in East Asia.

Keywords:

• Smart grids
• microgrids
• technology infrastructure
• developmental states
• green energy
• renewable power
• hybridized industrial ecosystems
• governed interdependence
• Korea
• Taiwan

Acknowledgements

I wish to thank the editors and reviewers of the Review of International Political Economy for their incisive comments and suggestions, which helped enrich the ideas presented in this paper immeasurably. I also wish to thank the participants of the ‘Comparative Capitalism’ Panel of the 25th IPSA World Congress of Political Science held in Brisbane, 21–25 July 2018, for their encouragement and support. All errors are my own. I am grateful for the support provided under Macquarie University's Faculty Research Travel Scheme (FRTS).

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1 Hybridization is distinct from privatization, outsourcing, and public–private partnerships (some which resemble hybrids, but fall short in important respects) (Weiss, 2014, p. 153). They are also not to be confused with British ‘quangos’. American-style hybrids or ‘quagos’ blend the public and private spheres, ‘incorporating market-mechanisms into their operations’.

2 GPNs are ‘inter-firm organization nexus of interconnected functions and operations through which goods and services are produced, distributed and consumed in different territories and regions in the global economy’ (Yeung, 2014, p. 72).

3 http://www.ksga.org/eng/sub3/sub1.asp [Accessed 18/6/18].

4 Green Tomorrow Consortium, no date, ‘K-MEG Project Planning’, at: https://energi.di.dk/sitecollectiondocuments/foreningssites/energi.di.dk/downloadboks/2011/k-meg%20gt%20consortium%20presentation.pdf [Accessed 4/6/18].

5 http://www.k-meg.org/history.en.do [Accessed 4/6/18].

6 For information on the ESCO scheme, see: http://www.kemco.or.kr/new_eng/pg02/pg02070000.asp [Accessed 4/12/17].

7 https://www.arup.com/projects/kmeg-hansung-city [Accessed 28/2/18].

8 http://www.smart-grid.org.tw/content_en/members/member_list.aspx?sn =7 [Accessed 7/3/18].

9 If overseas demonstration sites and those sites being run separately from the Smart Grid General Project are counted, there were a total of 40 demonstration sites led by Taiwanese players (TSGIA, 2016, p. 5).

10 http://esci-ksp.org/project/penghu-dongjiyu-microgrid-small-power-supply-system/ [Accessed 23/11/17].

11 http://elaw.klri.re.kr [Accessed 18/6/18].

12 http://www.smart-grid.org.tw/content_en/about/purpose.aspx

13 Author interview with Senior Researcher at Korea Information Society Development Institute (KISDI), Gwacheon, Korea, 18 November 2013.

14 http://www.mss.go.kr/site/eng/main.do [Accessed 21/3/18].

15 Author interview with Senior Member of R&D Strategy at the Ministry of Science, ICT and Future Planning (MSIP), Gwacheon, Korea, 22 November 2013.

16 Author interview with Senior Member of R&D Strategy at Ministry of Science, ICT and Future Planning (MSIP), Gwacheon, Korea, 23 December 2014.

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Sung-Young Kim

Sung-Young Kim is Lecturer in the Department of Modern History, Politics & International Relations. He researchers public and private efforts in the creation of global high-technology industries in East Asia, especially on the roles of ‘developmental states’ in building industries related to Information and Communication Technologies (ICT) and Green Energy Sectors. His articles include ‘Transitioning from Fast-Follower to Innovator’ Review of International Political Economy, 2012, 19(1); ‘The Politics of Technological Upgrading in South Korea’ New Political Economy, 2012, 17(3); ‘The Rise of East Asia’s Global Companies’ Global Policy, 2013, 4(2); ‘Developmental Environmentalism’ Politics & Society, 2015, 43(2) (with E. Thurbon); ‘Korea’s Greening Strategy’ The Asia-Pacific Journal: Japan Focus, 2016, 14(24) (with J.A. Mathews).